Bitcoin (BTC) Technical Analysis: [MUST READ] Both May Flash Crashes Show Very Similar Price Activity

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The crypto space is enduring the second flash crash to take place this month, as $25 Billion disappears from the market. The latest flash appears to be the result of two large sell orders placed during the American trading session yesterday at around 13:00-14:00 PST (21:00- 22:00 UTC+1). The first sell order sent Bitcoin tumbling by $225 (-2.68%), while the second, more severe, sell order extended Bitcoin’s losses by a further $523 (-6.12%).

This heavy selling momentum managed to drive BTC’s price under the psychological $8K support briefly, however bullish traders were quick to retaliate and have since been able to reclaim the $8,300 support today.

When we look at the two May flash crashes in more detail, we can see that both price actions and chart indicators seem to follow very similar paths. This inverse bart-like pattern does not appear to have a name, however it certainly has a few key characteristics that are worth looking at.

Bitcoin Price Analysis

On the 30-Minute BTC/USD chart we can see that the first flash crash that took place this month on May 17, had a number of distinguishing factors:

  • (1) The sell-off printed an extremely long lower wick
  • (2) The price pumped briefly after bulls snapped up the oversold BTC
  • (3) Shortly afterwards, BTC price fell into a downtrend
  • (4) Despite the downtrend, both RSI and MACD indicators began to show significant improvement.
  • (5) Price started to pump again as bullish sentiment returned.
  • (6) Price fell into sideways consolidation, before sharply surging to previous highs.

Looking at these features, we can see that the current price action ticks a great deal of these boxes already. Bitcoin bulls have already snapped up the oversold BTC, pumped the asset up to $8,370 and is now starting to downtrend. The RSI is already making consecutively higher highs despite the downtrending price trend, and we already have a bullish convergence on the MACD indicator.

By pasting the candle performance of the first flash crash on to the new flash crash, we can see that Bitcoin should begin uptrending soon as strong buying sentiment returns to the market. Judging by the projections, this uptrend could push BTC up as far as the $8,430 - $8,530 mark before entering into the sideways consolidation phase. From there, we could see Bitcoin retest the $9K level before going on to print a new YTD-high around $9,180.

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